Is Google a Monopoly? Wrong Question

July 9 (Bloomberg) -- Google responded last week to
European antitrust regulators investigating a long list of
claims against the world’s largest search engine. Whether or not
the complaints against Google are valid, they may be looking
backward. Increasingly, Google is not a search engine.

Yes, Google accounts for 80 percent of all Web searches in
Europe. It is facing criticism (some of it prompted by
Microsoft) for favoritism toward Google’s own specialty search
products -- travel, finance, hotels, restaurants, maps -- that
may put its competitors at a disadvantage. In the U.S., the
Federal Trade Commission has also been investigating Google for
the past year.

As pressure mounts on Google to change its practices, it’s
not clear whether antitrust regulators are asking the right
questions. Although European Commission authorities are focused
on Google’s familiar Web pages of blue links, and the prominence
of Google products on those pages, Google seems to be heading in
a different direction. It wants to be whispering to individual
users by way of its Google devices.

Whether competition law has anything to say about this is
an open question. Do we require Chevrolet to allow all car-radio
manufacturers to install their devices in its vehicles? (No, we
don’t.)

Perfect Search

In November 2009, Google’s vice president of search
products and user experience, Marissa Mayer, described the
perfect search engine: “It would be one that could understand
speech, questions, phrases, what entities you’re talking about,
concepts. It would be able to search all of the world’s
information, [find] different ideas and concepts, and bring them
back to you in a presentation that was really informative and
coherent.”

Two years later, Apple introduced its voice-recognition
software, Siri, for the iPhone. It seemed to fit that job
description. Except for one detail: Siri is inaccurate almost a
third of the time.

Last month Google made a series of intriguing announcements
signaling that deeply contextualized, personalized information
services aimed right at Siri will be rolled out this month in an
update to Android phones. Users won’t have to ask specific
questions because their device will already know where they are
-- and even what their calendar says they’re doing. Google Now
will display transportation information, weather, sports scores,
restaurant locations and presumably any other contextually
relevant information. A soothing Siri-like voice will answer a
murmured query if Google Now hasn’t already figured out the
user’s needs.

Just as the term “horseless carriage” was overtaken by
“automobile,” “search engine” will soon sound primitive to our
21st-century ears. Instead, you will have a digital deputy that
travels with you and is simpler to use and tailored to your
wants and needs.

Because Android phones already command more than 50 percent
of the U.S. market for handheld devices, all Google has to do is
hang on to its Android customers in order to have the scale and
scope it needs to be successful. If its pilot fiber optic
installation in Kansas City, Kansas, and Kansas City, Missouri,
works and can be replicated, Google can also avoid dependence on
any wireless carrier: Unlicensed wifi hotspots connected to
fiber nodes will provide users with mobile connectivity, and
Google won’t have to ask permission from AT&T or Verizon to
introduce a new device or service.

Vertical Integration

Google is not alone in climbing the heights of vertical
integration. Apple and Facebook are working together more
closely, with Facebook the default calendar and contact app in
Apple’s latest operating system. And Facebook is supposedly
planning its own phone.

What competition law has to say about the personalized,
vertically integrated ecosystems now being built by Apple,
Facebook and Google is far from clear. Consumers will have a
choice of competing handsets, as they do now. But their
subsequent options (what calendar, what map, what apps) may be
sharply limited. Signing up with a particular brand of personal
assistant will lead to a cascade of path-dependent filters, as
software learns more about its users and serves them more
directly.

In response to European and U.S. competition authorities,
Google is likely to agree to better labeling of its search
results to more clearly show Google’s commercial relationships
to particular links. This may be a solution to a fading problem.
As “search” becomes an anachronism and personalization the new
normal, we’ll have deeper issues to deal with.

(Susan P. Crawford is a contributor to Bloomberg View and a
visiting professor at the Harvard Kennedy School of Government
and Harvard Law School. She is a former special assistant to the
president for science, technology and innovation policy. The
opinions expressed are her own.)

Today’s highlights: the editors on whether it’s a penalty or a
tax and the latest jobs report; William D. Cohan on Finra’s
captive arbitration system; Albert R. Hunt on gaming the
Electoral College; Simon Johnson on banks’ living wills; Pankaj
Mishra on the false promise of Asian values; Jed Kolko on the
downside of rising house prices.